Unformatted text preview: tains three sections:
Cash Disbursements, and
Financing. Shows beginning and ending cash balances. Chapter
9-33 Financial Budgets:
Basic Format Chapter
Financial Budgets: Cash Budget
Cash Receipts Section: Includes expected receipts from the principal sources of
revenue – usually cash sales and collections on credit sales.
Shows expected interest and dividends receipts as well as
proceeds from planned sales of investments, plant assets,
and capital stock. Cash Disbursements Section: Includes expected cash payments for direct materials and
labor, taxes, dividends, plant assets, etc. Financing Section: Shows expected borrowings and repayments of borrowed
funds plus interest. Chapter
9-35 Financial Budgets: Cash Budget
Example – Hayes Company Assumptions
(1) January 1, 2011, Cash balance: $38,000.
(2) Sales: Collect 60% in quarter sold; 40% in next quarter; collect December 31, 2011 Accounts Receivable in Quarter 1. (3) Expected sale of short term investments: $2,000 in Quarter 1.
(4) Direct Materials: Pay 50% in quarter purchased; 50% in next
pay December 31, 2011 Accounts Payable in Quarter 1. (5) Direct Labor: pay 100% in quarter incurred.
(6) Manufacturing Overhead and Selling/Administrative Expenses:
Pay (except depreciation) in quarter incurred. (7) Expected purchase of truck: $10,000 cash in Quarter 2.
View Full Document